Dropbox announced today it has started a $20 million corporate foundation that will make no-strings-attached gifts to human-rights organizations, making it the latest Silicon Valley tech company to establish a formal philanthropy.
The announcement of the foundation and its first four grantees — nonprofits that are located in the Bay Area, Brooklyn, Dublin, and London — comes as speculation heats up that Dropbox plans to go public. Dropbox, which developed file-sharing technology, long ago surpassed “unicorn” status, a designation for tech start-ups worth more than $1 billion, and could be worth up to $10 billion, according to recent press reports.
Dropbox follows other tech companies, including eBay, Salesforce.com, and Yelp, that have set up foundations. It remains to be seen whether the company will adopt the practice used by some other tech companies like Chinese e-commerce giant Alibaba and Seattle software company Tableau of setting aside shares for charity after or during an initial public offering.
Bart Volkmer, Dropbox’s general counsel, declined to discuss any plans about taking the company public.
Billions in Silicon Valley
Both Dropbox and its founders, Drew Houston and Arash Ferdowsi, made gifts to start the foundation. Volkmer declined to provide specific amounts.
Houston is worth about $1 billion, according to Forbes, and Ferdowsi has amassed about $500 million.
The Dropbox Foundation was first incorporated as the Dropbox Foundation for Good in 2016 as a supporting organization at the Silicon Valley Community Foundation, a regional grant maker that has attracted billions of dollars in tech capital and now controls more assets than the Ford Foundation.
The relationship with Silicon Valley Community Foundation keeps Dropbox tightly enmeshed in a network of tech megadonors including Facebook co-founder Mark Zuckerberg and his wife, Priscilla Chan, GoPro founder Nick Woodman, and WhatsApp founder Jan Koum, who have poured billions into the community foundation.
Today’s announcement provided a few more details on the foundation’s mission and structure. It remains a Silicon Valley Community Foundation supporting organization, which gives the community foundation a majority of slots on the Dropbox Foundation’s board, including Emmett Carson, the community foundation’s president. The arrangement effectively gives the community foundation control over investment and grant-making decisions.
Focus on Children
Dropbox Foundation’s first four grant recipients are: GOAL, a Dublin group that responds to humanitarian crises; Larkin Street Youth Services, a San Francisco nonprofit that supports at-risk children; War Child UK, a London organization that educates and works to ensure the safety of children in conflict zones; and Witness, a Brooklyn nonprofit that trains activists in the use of video technology to document human-rights abuses.
Dropbox declined to say how much each group received. The grants are all unrestricted, meaning the recipients don’t have to earmark them to specific programs and can use the money for things like salaries, equipment, or travel.
By offering general operating support, Dropbox recognizes that grantees have more expertise than the foundation does in working to expand human rights, said Volkmer, who also serves on the foundation’s board.
“They know what they’re doing,” Volkmer said. “The foundation doesn’t want to dictate operationally, on the ground, how things should be working.”
Volkmer said the foundation will continue to make both domestic and international grants but said he didn’t know future grants would be evenly split, as they are among the foundation’s first four grantees. In addition to providing unrestricted gifts, Dropbox had meetings with each of the grantees about how they might use the company’s staff as volunteers to provide advice on things like cybersecurity and maximizing the use of technology.
The volunteers should be helpful in producing an overall assessment of War Child UK’s technology infrastructure and how it can better deploy technology and communications equipment in dangerous parts of the world, said Nina Saffuri, the organization’s director of fundraising.
She declined to say how much War Child UK had been given but said the nonprofit was “over the moon” about the fact that there were no restrictions placed on the gift, because it can rush money out the door when it is needed. And it can still apply for other international grants, which can take months to process.
“They trust us,” she said. “It means we can make the quickest impact in emergency situations.”
